Is it better to have a lightweight flywheel or a heavier flywheel? (this is for a 357 sbc)

 

Yes.

Light flywheel = big motor, lots of torque, light car, lots of gear reduction

Heavy flywheel = small motor, weak torque, heavy car, highway gears

 

Yeah I figured since its way better for throttle response but someone told me they thought maybe they give out more torque but I wasn't sure. Thanks!

 

The flywheel doesn't "give out" torque; but it does store energy. At the expense of course, of consuming energy in the process of storing it (duh).

A heavy one helps a small motor launch a heavy car. These cars aren't exactly heavy; so even with a tiny motor like a 350 in whatever overbore, a lightweight one is usually entirely adequate. Especially if it has a decent gear, like, such that the final drive ratio (1st gear x rear gear) is in the 10:1 range at the line, with typical street size tires (26-27").